The property industry in Australia has seen confidence rise in recent months, despite concerns about the slowing economy. This is largely due to six months of rising house prices throughout the country.
The June quarter of the ANZ/ Property Council Report showed a one point increase in confidence, led by South Australia and Western Australia.
In most states, the commercial property sectors have fared well, however, increasing cost of living and interest pressure on household budgets could lead to some headwinds in the industrial sector.
The impact of rising rates has acted as a dampener on overall confidence. Hotels and other services may also be affected if Australians pull back on domestic travel.
Expectations around development in the pipeline surged in WA, SA, and the ACT, while Victoria rose slightly and other states fell. According to ANZ senior economist Adelaide Timbrell, demand is not the issue; it’s the availability of skilled people to do the work, and making sure the funding, materials and labour costs all make sense for approvals.
Property Council chief executive Michael Zorbas said the industry is in the midst of a “perfect storm for uncertainty at the moment”. The main concern of the industry is housing supply and affordability with the government, which is far more important than economic management.
The Albanese Government’s Housing Australia Future Fund has stalled in the Senate last month despite it’s potential to deliver 40,000 new social and key worker homes. Mr Zorbas said the federal Senate needs to closely look at why it isn’t passing, and that anything else such as rent capping, which could reduce supply and repel new investment, should be avoided.
Overall, although the property industry in Australia is facing difficulty due to rising costs, it remains confident and firmly supports the passage of the Housing Australia Future Fund, with the hope of reducing concerns about housing supply and affordability.